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With more than a quarter of its projects disappearing since December 2014, more needs to be done to improve the consistency and accuracy of the UK Government construction pipeline, according to analysis published today by KPMG.

The report, UK Government Construction Pipeline - KPMG Analysis, indicates that there is a total decrease of 886 (28%) construction and infrastructure projects since the previous pipeline analysis in December 2014 (from 3,148 to 2,262 in August 2015), relating mainly to the Defence, Justice and Police sectors (860 projects alone relate to these sectors).

KPMG understands that the remarkable decrease in the number of projects is largely due to potential projects being removed from the pipeline to avoid pre-empting decisions in the forthcoming Spending Review. There are also a number of projects that have been completed since the December 2014 iteration.

Most of the decrease in value attribute to projects completing mainly in two sectors:

£6.7 billion decrease in Transport projects - relating to spend already incurred on a number of ongoing programmes, including Crossrail.

£2.8 billion decrease in Housing and Regeneration projects – relating to the completion of Decent Homes Backlog projects and a number of Affordable Housing projects and programmes also completed.

The analysis went on to reveal that 1,784 projects did not specify a construction start date, further raising questions about the completeness of the data.

The report also found that:

Transport and energy continue to dominate the pipeline, mirroring the National Infrastructure Pipeline, with nearly 70% of the pipeline (£82.1 billion) designated to these two sectors alone, despite only contributing 9% of the entire pipeline of projects by volume.

Defence, Justice and Police Forces projects account for over 74% of projects (1,672 projects inclusive) by volume, but only 10% (£11.4 billion) of total allocated spend. Spend across these three sectors relates to refurbishment, maintenance programmes and minor improvements/ small works/ new capital programmes.

Richard Threlfall, KPMG’s UK Head of Infrastructure, Building and Construction said: “It is clear that more needs to be done to improve the consistency and accuracy of the Government’s construction pipeline. A stable pipeline would give the construction industry good visibility of future demand and the ability to plan and invest for that demand. It would lead to efficiencies for the Government and hence for the taxpayer. Instead we have a pipeline whose data is so incomplete, and which fluctuates so wildly and erratically that the industry can place no detailed reliance on it.

“I hope that we will get a clearer picture in November when the Spending Review is published. But in the meantime the huge 28% drop in the number of projects included suggests some Government departments are putting projects on hold in the expectation that they get culled. I don’t expect we will see anything like the scale of cutback in capital programmes that the industry experienced in 2010, after the last election, but there is clearly cause for nervousness about the potential squeeze in spending.

“I hope the Government will recognise that what this industry most needs is long-term certainty and stability in demand, to provide it with the confidence to invest in technology and its workforce. Our growing economy is creating a welcome uplift in private sector demand, but the Government should not use that as an excuse to cut back its own investments, create another hiatus, and send ripples of uncertainty through the industry.”

The UK Government's Construction Pipeline is a detailed list of Government-led current and planned construction and infrastructure activity. It comprises central Government construction data and other public sector national and regional data collected by Government and presented by Barbour ABI. It is designed to provide contractors, suppliers and investors with a long-term view of planned projects and programmes from 2015 to 2020 and beyond.

The KPMG analysis reflects projects and programmes (herein “projects”) with committed funding. The total allocated value is £119 billion categorised into three spend periods: 2015-17, 2017-20, and Beyond 2020. The pipeline includes 2,262 programmes and projects in 16 sectors across 15 sub-regions.

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